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MEDIA AND

ENTERTAINMENT

Table of Content

Executive Summary……………….….……..3

Advantage India…………………..….……...5

Market Overview …………………….……...7

Recent Trends and Strategies……..……..17

Growth Drivers……………………..............22

Opportunities…….……….......…………….29

Industry Associations……………....….......32

Useful Information……….......………….....34

For updated information, please visit www.ibef.org Media and Entertainment 3

EXECUTIVE SUMMARY … (1/2)

Household televisions increased to 183 million in 2017* from 181 million in 2016 with 780 million TV viewing

individuals.

In 2017, television market generated a revenue of Rs 660 billion (US$ 10.14 billion).

Second largest TV

market

Note: * March 2017

Source: KPMG – FICCI Report, 2016 and 2018; Dish TV Investor Presentation, Ministry of Information and Broadcasting (MIB), NASSCOM, Telecom Regulatory Authority of India (TRAI),

Aranca Research

The Ministry of Information and Broadcasting (MIB) has officially completed all the four phases of digitisation, As

of March 2017, a total of 64.4 million set-top boxes (excluding Tamil Nadu) were set up in Phase 3 and Phase 4

areas.

Total of 243 FM channels (21 from the Phase - I and 222 from Phase – II) are operational. Under the phase III,

the Cabinet has already given permission to 162 FM channels in 69 cities to operate and 17 cities were provided

with licenses to operate in 2017.

Telecom Regulatory Authority of India (TRAI) plans to introduce a policy for broadcasting sector with a vision of

2020. The policy aims to usher a new era in the broadcasting sector where MRP of the TV channel will be

declared by broadcasters directly to the consumers, and will bring more transparency and choices to the

consumers.

One of the largest

broadcasting market


EXECUTIVE SUMMARY … (2/2)

Source: KPMG – FICCI Report, 2016 and 2018; Dish TV Investor Presentation, Ministry of Information and Broadcasting (MIB), NASSCOM, Telecom Regulatory Authority of India (TRAI)

The animation and Visual Effects (VFX) industry showcased a growth of 24.07 per cent, largely led by a 34.91

per cent growth in VFX industry in 2017

During 2016-21, the segment is expected to grow at a higher CAGR of 17.2 per cent, largely led by the

continued growth in outsourced services and the swelling use of animation and VFX services in the domestic

television and film space, respectively.

Fast growing

animation industry

The Indian film industry is expected t o grow at a rate of 11.9 per cent by 2020.

Digitalisation has played the major role in the growth of Indian film industry

By 2019, cinema exhibition industry in India is expected to have over 3,000 multiplex screens

Exceptional growth in

film industry

Total subscriber base for Indian television industry is expected to increase to 195 million by 2019 from 183

million in 2017.

As of March 2018 active DTH subscriber base in the country stood at around 67.53 million.

Rising no of

subscribers

Media and Entertainment

ADVANTAGE INDIA


ADVANTAGE INDIA

Rising incomes and evolving lifestyles have

led to higher demand for aspirational products

and services

Higher penetration and a rapidly growing

young population coupled with increased

usage of 3G, 4G and portable devices would

augment demand

Entertainment Industry is set to expand at a

CAGR of 11.80 per cent over 2016–21, one of

the highest rates globally

Television and AGV segments are expected

to lead industry growth and offer immense

growth opportunities in digital technologies as

well.

From April 2000 to March 2018, FDI

Inflows in Information and

Broadcasting (including print media)

sector reached US$ 7.13 billion

Increasing M&A activity

More big-ticket deals such as Walt

Disney- UTV, Sony-ETV and Zee- Star

Entry of big players across all segment

of industry.

The Government of India has increased the

FDI limit from 74 per cent to 100 per cent.

Measures such as digitisation of cable

distribution to improve profitability and ease

of institutional finance

Increasing liberalisation and tariff relaxation

In 2011, Indian Government passed the

“The Cable Television Networks

(Regulation) Amendment Act, 2011” for

digitisation of cable television networks.

ADVANTAGE

INDIA

Source: KPMG Report 2015, KPMG – FICCI Report, 2016; Dish TV Investor Presentation, Ministry of Information and Broadcasting (MIB), Aranca Research

Notes: Animation, Gaming and VFX, VFX - Visual Effects, M&A - Merger and Acquisition, CAGR - Compound Annual Growth Rate, FDI - Foreign Direct Investment, Deadline for the entire

country to be digitised is December 2014, E – Estimate, P – Projected


MARKET OVERVIEW


THE ENTERTAINMENT SECTOR IS SPLIT INTO NINE

SEGMENTS

Source: : KPMG – FICCI Report, 2018, Aranca Research

Entertainment

Television

Online Gaming

Animation and VFX

Out of Home

(OOH)

Music Digital

Advertising

Radio

Note: VFX - Visual Effects

Print

Films


THE INDIAN ENTERTAINMENT INDUSTRY IS

GROWING RAPIDLY

Indian media and entertainment (M&E) industry grew at a CAGR of

12.25 per cent from 2011-2017; and is expected to grow at a CAGR

of 11.6 per cent during 2016-20 to touch Rs 2,032 billion (US$ 31.53

billion) by 2020 from Rs 1,308 billion (US$ 19.46 billion) in 2016.

The next 5 years will see digital technologies increase their influence

across the industry leading to a sea change in consumer behaviour

across all segments

The entertainment industry is projected to be more than US$ 62.2

billion by FY25

With an intent of ushering in an era of conversational computing,

Microsoft has released an artificial intelligence chatbot known as

Ruuh for Facebook Messenger. The English speaking chatbot is only

available to users in India and is to be used for entertainment

purposes.

The industry provides employment to 3.5-4 million people, including

both direct and indirect employment as of 2017.

Market Size US$ billion

11.31 12.74 14.25

15.9

2

17.9

5

19.4

6

22.6

2

25.7

6

28.6

6

31.5

3

126.2

0

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8 P

201

9 P

202

0 P

202

2 P

Source: : KPMG – FICCI Report 2017 & 2018, Aranca Research

Notes: CAGR - Compound Annual Growth Rate, P – Projected


SEGMENTS OF INDIAN ENTERTAINMENT INDUSTRY

44.81%

20.57%

10.59%

8.08%

4.55%

4.41% 2.04%

2.31% 1.77% 0.88% TV

Print

Films

Digital Advertising

Live events

Animation & VFX

Gaming

OOH

Radio

Music

Source: KPMG – FICCI Report 2017, Economic Times, Aranca Research

Television, print and films together accounted for 75.97 per cent of market share in 2017, in value terms

PVR Cinemas plans to add around 75 screens across India during FY 2017-18, thereby raising its capacity to 650 screens and has a target to

achieve 1,000 screens in India by 2020. The number of screens increased to 612 in 2017.

Google's video platform, YouTube, plans to increase its user base in India to 400 million, as rising internet penetration in the rural areas will enable

the consumers to access videos on their smartphones.

The Indian digital advertising industry is expected to grow at a Compound Annual Growth Rate (CAGR) of 32 per cent to reach Rs 18,986 crore (US$

2.93 billion) by 2020, backed by affordable data and rising smartphone penetration.

Size of major industry segments (2017)

42.42%

18.16%

9.45%

11.02%

5.61%

5.36%

3.35%

2.12% 1.67% 0.01 TV

Print

Films

Digital Advertising

Live events

Animation & VFX

Gaming

OOH

Radio

Music

Size of major industry segments (2020P)

Notes: E – Estimated, P – Projected, OOH – Out of Home, TV – Television


TELEVISION, ONE OF THE LARGEST AND FASTEST

GROWING SEGMENT

27.05% 26.39% 25.88% 25.35%

72.95% 73.61% 74.12% 74.65%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

2017 2018E 2019E 2020E

Subscription Revenue Advertising Revenue

Source: KPMG – FICCI Report 2018, Aranca Research

In 2017, television market generated revenue of Rs 660 billion (US$

10.19 billion).

In 2017, advertising and distribution revenues increased to Rs 267

billion (US$ 4.10 billion) and Rs 393 billion (US$ 6.03 billion),

respectively.

In 2017, broadcasters revenue increased to Rs 99 billion (US$ 1.52

billion) from Rs 90 billion (US$ 1.34 billion) in 2016.

Nonetheless, the share of subscription in the overall revenue of the

TV segment is expected to increase to 66.18 per cent by 2021.

Visakhapatnam port traffic (million tonnes) Broadcasters Revenue Forecast

Notes: E – Estimated, TV – Television


RADIO, ANIMATION and VFX, GAMING AND DIGITAL

ADVERTISING ON HIGH GROWTH PHASE

Source: FICCI Report 2018, Aranca Research

Note: VFX- Visual Effects; P – Projected, E --Estimated FICCI Report 2017, Aranca Research,

^ - according to Digital First Journey report by KPMG, * - According to Digital Advertising Report by Dentsu Aegis Network

Radio, animation and VFX, gaming and digital advertising are also

emerging as fast growing segments.

During 2016-20, these segments are expected to increase at CAGRs

of:

• Online Gaming (27.5 per cent)

• Digital Media (24.9 per cent)

• Animation (20 per cent)

• Live Events (18 per cent)

With increasing use of internet and other digital resources, Digital

Advertising is expected to grow at the fastest rate among peers like

print media, radio and outdoor advertising.

India digital advertising market has reached Rs 8,202 crore (US$

1.27 billion) in 2017 and is forecasted to grow at a CAGR of 32 per

cent to reach Rs 18,986 crore (US$ 2.95 billion) by 2020.*

Advertising expenditure in India is expected to grow 13 per cent

year-on-year to Rs 69,346 crore (US$ 10.71 billion) in 2018.

Expenditure on digital advertisements in India is expected to

increase at CAGR of 30.8 per cent between 2016-21^, as internet

penetration and data consumption increases in the country.

Visakhapatnam port traffic (million tonnes) Industry size of emerging segments (US$ million)

397.2 447.2

620.6

1,055.1

1,405.4

1,773.7

2,342.9

3,475.6

824.9

998.7

1,241.3

1,768.8

855.5

968.8

1,194.7

1,691.2

-

500.0

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0

3,500.0

4,000.0

FY2016 FY2017 FY2018E FY2020E

Online Gaming Digital Media

Animation & VFX Live Events


ADVERTISING REVENUES

Source: KPMG – FICCI Report 2017, Economic Times, Aranca Research

Advertising revenue share (2017)

Notes: TV – Television, * - according to Indian Readership Survey 2017 (IRS 2017)

5.4

7

5.8

8

5.3

9

5.4

8

6.1

3

6.8

6

7.3

6

8.1

6

27.8

9.6

5.2

11.3

16.5 17.6

12.5

7.4

0

5

10

15

20

25

30

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

Total Growth Rate%

Advertising revenue (US$ billion)

37%

35%

4% 1%

6%

17.50%

TV

Print

Radio

Cinema

Outdoor

Digital

In 2016, total spending on advertising across all media across the

entertainment industry in India stood at US$ 7.85 billion, which is

expected to touch Rs 60,972 crore (US$ 9.52 billion) by the end of

2017 and Rs 68,334 crore (US$ 10.67 billion) by 2018 and Rs 1.07

trillion (US$ 16.70 billion) by 2020.

India’s Advertising revenue is forecasted to grow at the rate of 12.03

per cent in 2018.

Television advertising was the largest contributor, accounting for 37

per cent and generated a revenue of Rs 267 billion (US$ 4.12 billion)

in 2017.

Print advertising was the second largest contributor, accounting for

35 per cent of the advertising share in 2017

Newspaper readership in India has increased by 40 per cent to 407

million in 2017 from 295 million in 2014.*

Mobile advertising has emerged as the 3rd largest advertising

medium in India. Spending on mobile advertising in India is expected

to grow to US$ 1.53 billion by the end of 2018.

India is one of the top five markets for the media, content and

technology agency, Wavemaker, where it services clients like Hero

MotoCorp, Paytm, IPL and Myntra among others.


REGIONAL ENTERTAINMENT

25.7%

24.4%

11.6%

9.2%

5.0%

5.0%

2.3%

2.1%

0.4% 13.0%

Tamil

Telgu

Kannada

Malayalam

Bengali

Marathi

Oriya

Bhojpuri

Gujarati

Others

Source: KPMG – FICCI Report 2016 and 2017, Economic Times, Aranca Research

Regional Entertainment channels comprising mostly of regional

GECs (General Entertainment Channels), regional movies and

regional music.

In print media, the rise in literacy rates, significant population growth,

the rise in incomes in smaller towns and the entry of big players in

regional markets is likely to drive future expansion of circulation and

readership across India.

Viewership in South India is dominant for regional entertainment as

Tamil and Telugu channels together account for more than half of

the total viewership. It is comparatively less for Oriya and Bhojpuri,

which is equivalent to only 2 per cent each.

Between 2015-2017, YouTube’s regional viewership in India has

tripled, with the top 10 regional YouTube channels having subscriber

bases ranging between 300,000-800,000.

Visakhapatnam port traffic (million tonnes) Viewership in regional channels in 2016


MUSIC INDUSTRY

19

2.1

0

19

8.2

8

16

4.2

7

16

0.5

8

16

8.3

6

18

1.4

6

19

6.5

6

22

0.8

8

27

8.0

4

0.00

50.00

100.00

150.00

200.00

250.00

300.00

2011 2012 2013 2014 2015 2016 2017 2018E 2020E

Music entertainment revenues is expected to touch US$ 278.04

million by 2020 from US$ 192.10 million in 2011, registering a growth

of 4.19 per cent

By 2020, the number of online music listeners in India will reach 273

million, while the digital music revenues is likely to cross US$ 507.7

million.

Indian music Industry is forecasted to grow at a CAGR of 12.25 per

cent from 2017-2020.

Visakhapatnam port traffic (million tonnes) Revenues for the music industry (US$ Million)

Source: FICCI Report 2017 and 2018, Aranca Research

Note:E Estimate


KEY PLAYERS IN THE MEDIA AND ENTERTAINMENT

INDUSTRY

Television Print Films Music

Star India Pvt Ltd

Bennett, Coleman and Co

Ltd

Yash Raj Films Studios

Saregama India Ltd

Zee Entertainment Enterprises

Ltd

HT Media Ltd

Eros International

Media Ltd

Super Cassettes

Industries Ltd

Multi Screen Media Pvt Ltd

Living Media India Ltd

Red Chillies

Entertainments Pvt Ltd

Tips Industries Ltd

Source: Company websites


RECENT TRENDS

AND STRATEGIES


NOTABLE TRENDS IN THE MEDIA AND

ENTERTAINMENT INDUSTRY… (1/2)

Source: KPMG – FICCI Report, 2018, Economic Times, Aranca Research

The government announced digitisation of cable television in India in 4 phases, which was slated for completion

by the end of December 2016. Phase III was almost completed in December 2015, while Phase IV is under

progress.

The Direct-To-Home (DTH) subscription is growing rapidly driven by content innovation and product offerings

The television industry grew to Rs 660 billion (US$ 10.14 billion) in 2017 from Rs 594 billion (US$ 8.84) in 2016

at a CAGR of 11.2 per cent.

Television

The print industry accounted for the second largest share in M&E to reach Rs 303 billion (US$ 4.66 billion) in

2017, with a CAGR of 7 per cent till 2020.

The Print market is expected to reach US$6.69 billion by 2021.

Increasing income levels and evolving lifestyles have led to robust growth in niche magazines segment.

Considering the huge potential in regional print markets, national advertisers are entering these markets to

increase their advertising share.

Print

The Indian film industry is largest producer of films globally with 400 production and corporate houses involved in

film production.

The revenues earned by the Indian film industry in 2018 would reach Rs 165.7 billion (US$ 2.56 billion) and are

expected to further grow at a CAGR 4.98 per cent during 2018-2020. Increasing share of Hollywood content in

the Indian box office and 3D cinema is driving the growth of digital screens in the country.

Film

With increasing penetration of internet and digital mediums, digital segment is expected to outperform other

sectors of entertainment.

Although Out-of-Home segment has a low contribution to the total of entertainment industry, in coming years it is

going to witness a significant growth.

The market size for Out of Home (OOH) entertainment reached Rs 34.3 billion (US$ 526.72) million in 2017.

Out of Home and digital


Increasing FM enabled phones and car music systems

As of December 2015, 243 channels are operational in 86 cities in India. Further, 21 private FM channels were

set up during Phase-I and an additional 222 channels were set up during Phase-II

In FY17, the total number of radio frequencies auctioned were 266 across 92 cities, only 66 frequencies got sold

to 11 companies.

In 2017, the radio industry in India accounted for a market size of Rs 26 billion (US$ 399.26 million), registering

growth of CAGR 8.33 per cent during 2016-17.

NOTABLE TRENDS IN THE MEDIA AND

ENTERTAINMENT INDUSTRY… (2/2)

Growing focus on the ‘kids genre’ and rise in dedicated TV channels for them. As the advertising industry grows,

the share of animation driven advertisements are expected to also grow

Surge in 3D/HD animated movies in theatres and use of animation and VFX in TV advertising and gaming.

Growing outsourcing of VFX and gaming to India is due to cost effectiveness of Indian players

Content localisation such as T20fever.com, IPL, Khel Kabaddi, etc.

Animation and VFX industry in India is expected to grow at a CAGR of 20.4 per cent over 2016-2020 and the

online gaming industry is expected to grow at a CAGR of 27.5 per cent during the same period.

Animation, Online

Gaming and VFX (AGV)

The music industry is on fast paced growth with increasing international associations. The Indian music industry

is a consortium of 142 music companies

Players are looking at new ways and mediums to monetise music, such as utilising social media to promote

music. Mobile phones, iPods and mp3 players – devices that enable music on-the-go – are becoming the

primary means to access music

Digital music on mobile continues to drive music industry revenue and digital revenues are expected to reach

US$394.22 million by 2021. Digital revenues contribute 55 per cent of the music industry and is expected to

contribute close to 62 per cent by 2018.

Music

Radio

Source: KPMG – FICCI Report, 2018, Economic Times, Aranca Research


ARPU ON AN UPTREND POST - DIGITISATION

3.8

7

3.9

8

4.1

5

4.5

2 5.0

7 5

.63

6.2

4

3.3

4

3.3

8

3.4

9 3.9

2 4.4

6 5

.09

5.7

4

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

201

5

201

6

201

7P

201

8P

201

9P

202

0P

202

1P

DTH Digital Cable

With higher scope of introduction of new and niche channels with

digitisation, ARPU levels are expected to increase in the coming

years

ARPU for DTH subscribers has seen an increase of around 2.84 per

cent in 2016. The more promising trend is that DTH operators are

able to increase collections from customers by providing additional

services such as HD channels, premium channels and other value

added services.

HD adoptions continues to drive ARPU growth for DTH players with

the average ARPU of a HD subscribers at ~1.5 to 2 times more the

ARPU of non HD subscribers.

Digital cable on the other hand, has not seen any significant ARPU

increases as compared to the DTH ARPU. For digital cable,

deployment of different channel packages will be the key driver to

raise ARPUs

As of March 2018, active DTH subscribers stood at 67.53 million.

Visakhapatnam port traffic (million tonnes) Average revenue per user per month (US$ )

Notes: E – Estimate, F - Forecast

Source: KPMG – FICCI Report 2015 and 2016


STRATEGIES ADOPTED

Source: Aranca Research, KPMG Report on Engineering sector

The manufacturing companies such as Videocon is offering combo deals such as LED/LCD sets with

Videocon set-up boxes and dish services

The Dish TV is also offering the set up boxes with many additional channels

Increasing digitisation in the country is helping such companies to further add up to their revenues

Marketing strategies

As television industry is a dominant segment in the entertainment industry even the film makers promote their

films at this platform so as to reach to the mass audiences for example the reality shows, TV advertisements,

etc

Many film producers, actors, etc have shifted to the television industry so as to remain in the race and

maintain their fan following

TV programmes being used as a medium of promoting films or other entertainment events

After bagging media rights of Indian Premier League (IPL), Star India has also won broadcast and digital

rights for New Zealand Cricket upto April 2020.

Television: A common

medium

Audience is the ultimate consumer in this industry and therefore films, advertisements, music and all the

products of entertainment sector is based on the tastes and preferences of the audiences of the nation

Audience: the ultimate

consumer

Regional entertainment is growing and therefore, the suppliers are able to expand their forte in the products

Zee Television, Star TV have their regional channels both for entertainment and news

The South Indian television industry is one of the oldest operational television sectors across the nation and

is further growing due to the regional content

Viewership in regional

entertainment


GROWTH DRIVERS


GROWTH DRIVERS OF MEDIA AND ENTERTIANMENT

SECTOR IN INDIA

Source: EY Annual Report, FICCI Report 2018

Growing demand Rising Income Investments Government Initiatives

India’s per capita income at

current prices grew at the

rate of 8.6 per cent to reach

Rs 112,835 (US$ 1,750.74)

in FY18

In 2017-2025, elite,

affluent, aspirers and next

billion income classes are

expected to grow at a

CAGR of 11 per cent, 9 per

cent and 5 per cent, 2 per

cent respectively.

Total number of Mergers

and Acquisition deals

increased to 63 in FY17

from 58 in FY16

The Government of India

has carved out a National

Film Policy which will tap

potential mainly in the

animation segment

The Indian and Canadian

Government have signed

an audio visual co-

production deal to enable

producers from both the

countries exchange and

explore their culture and

creativity, respectively.


increased the FDI limit from

74 per cent to 100 per cent


has agreed to set up the

National Centre of

Excellence for Animation,

Gaming, Visual Effects and

Comics industry in Mumbai.


INCOME FACTOR DRIVING GROWTH

1.5% 2.0% 2.6% 5.0% 3.0% 6.0% 6.4%

11.0% 8.0%

15.0% 15.0%

20.0%

42.0%

45.0% 45.3%

46.0%

44.0% 31.0% 30.7% 18.0%

2005 2016 2017 2025F

Elite(>30800) Affluent(15400-30800)

Aspirers(7700-15400) Next billion(2300-7700)

Strugglers(<2300)

Apart from the impact of rising incomes, widening of the consumer

base will also be aided by expansion of the middle class, increasing

urbanisation and changing lifestyles

The entertainment industry will also benefit from continued rise in the

propensity to spend among individuals; empirical evidence points to

the fact that decreasing dependency ratio leads to higher

discretionary spending on entertainment.

Traditionally only advertising has been a key source of revenue for

Media and Entertainment industry, but off late revenue from

subscription and value added services has also contributed

significantly. With consumers willing to pay for content and extra

services, the subscription segment will play an important role in the

post digitisation era.

Visakhapatnam port traffic (million tonnes) Indian residents shifting from low to high income groups (%)

Million Household, 100%

Source: McKinsey Quarterly Report

Note: Income distribution is calculated in constant 2015 dollars; $1=65. Because of rounding, not all percentages add up to 100. F - Forecast

209.10 266.50 304.80 267


FDI limit in radio, including private FM channels have been increased from 26 per cent to 49 per cent

Private operators allowed to own multiple channels in a city, subject to a limit of 40 per cent of total channels in

the city

Private players allowed to carry news bulletins of All India Radio

Further boost may be given to the radio sector by charging license fees on the basis of ‘net income’ so as to

provide relief to loss making radio players

POLICY SUPPORT AIDING SECTOR GROWTH … (1/2)

Notes: FDI – Foreign Direct Investment, FII – Foreign Institutional Investors

Digitisation of the cable distribution sector to attract greater institutional funding, improve profitability and help

players improve their value chain

FDI limit for DTH satellite and digital cable network was raised from 74 per cent to 100 per cent by the

government

No restriction on foreign investment for up-linking and downlinking of TV channels other than news and current

affairs

Television

Co-production treaties with various countries such as Italy, Brazil, UK and Germany to increase the export

potential of the film industry

Granted ‘industry’ status in 2001 for easy access to institutional finance

FDI of up to 100 per cent through the automatic route has been granted by government

Entertainment tax to be subsumed in the GST; this would create a uniform tax rate regime across all states and

will also reduce the tax burden

Film

Radio

Source: KPMG – FICCI Report 2017 & 2018


POLICY SUPPORT AIDING SECTOR GROWTH … (2/2)

Source: PwC India Entertainment and Media Outlook 2011, KPMG – FICCI Report 2015 and 2016

Parliamentary approval on the Copyright Act (Amendment) Bill, 2012, which strengthens the royalty claims of

musicians, lyricists and others in the field

Policies are adopted against digital piracy and file-sharing to block illegal music websites

Adoption of revenue sharing model by Copyright Board requiring FM radio companies to share 2.0 per cent of

their net advertising revenues with music companies

Music

100 per cent FDI allowed in the sector through automatic route provided it is in compliance with RBI

guidelines

The government has carved out a National Film Policy to tap the potential of the film sector mainly for the

animation segment

State-level initiative by governments to encourage animation industry.

Animation, Gaming and

VFX (AGV)

FDI/NRI investment of up to 26 per cent in an Indian firm dealing with publication of newspaper and

periodicals

FDI/NRI investment of up to 26 per cent in publications of Indian editions of foreign magazines

FDI/NRI investment of up to 100 per cent in publications of scientific and technical magazines/ specialty

journals/ periodicals

Print


KEY M&A DEALS IN THE SECTOR

Acquirer Target Date Value

Dish TV Videocon D2h February 2018 US$ 2.4 billion

Zee Entertainment 9X Media and INX Music October 2017 US$ 24.56 million

Delta Corporation Gaussian Network September 2017 US$ 34.37 million

Dentsu Aegis Network (DAN) SVG Media Pvt. Ltd April 2017 US$ 100-120 million

Hotstar Zapr Media Labs March 2017 NA

Zee Media Corporation (ZMCL) Reliance Broadcast Network (RBNL) November 2016 US$ 237.79 million

Eros International Media Ltd Puja Entertainment June 2016 NA

PVR DT Cinemas May 2016 US$ 81.89 million

Sony Pictures Networks India Pvt. Ltd.

(SPN) 9X Media Pvt. Ltd. April 2016 US$ 33 million

Zee Entertainment Sarthak TV July 2015 US$ 18.83 million

Viacom Inc. Prism TV July 2015 US$ 153 million

Dainik Jagran group Radio City June 2015 US$ 60 million

Carnival Films Private LTD. BIG Cinemas December 2014 US$ 111 million

Prime Focus Ltd Reliance Media Work ltd. July 2014 US$ 61 million

Mergers and Acquisition deals

Source: KPMG – FICCI Report 2015 and 2016, News articles Notes: NA – Not Available


INCREASING FDI INFLOWS INTO THE SECTOR

FDI inflows into the Information and Broadcasting sector during April

2000 to March 2018 rose up to US$ 7.13 billion.

Demand growth, supply advantages and policy support are the key

drivers in attracting FDI.

Visakhapatnam port traffic (million tonnes) FDI inflows into Information and Broadcasting sector (US$

billion)

Source: Department of Industrial Policy and Promotion (DIPP)

0.40 0.70

0.70

0.10 0.30 0.97

1.52

0.64

2.20

2.90

3.60 3.70 4.00

4.97

6.49

7.13

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

Annual FDI Inflow

Cumulative from April 2000


OPPORTUNITIES


GROWTH OPPORTUNITIES IN THE MEDIA AND

ENTERTAINMENT SEGMENTS…(1/2)

Television industry is expected to increase from Rs 660 billion (US$ 10.14 billion) in 2017 and reaching Rs

862 billion (US$ 13.37 billion) by 2020.

Television is projected to reach Rs 734 billion (US$ 11.34 billion) by 2018.

Television

The print industry was worth Rs 303 billion (US$ 4.65 billion) in 2017 and is expected to reach Rs 369 billion

(US$ 5.73 billion) by 2020.

Accelerated growth is forecasted in regional print and local news segments.

Print industry will reach Rs 331 billion (US$ 5.11billion) in 2018

Print

The Indian animation industry was worth Rs 17 billion (US$ 261.06 million) in 2017 and is expected to

expand to Rs 114 billion (US$ 1.77 billion) by 2020. The VFX industry was worth Rs 31.3 billion (US$

480.65 million).

Growth in international animation films, especially 3D productions and the subsequent work for Indian

production houses will help the growth in this segment

Animation and VFX industry is expected to reach Rs 80 billion (US$ 1.24 billion) in 2018.

Animation and VFX


The Indian Premier League value increased to US$ 5.3 billion in 2017 from US$ 4.2 billion in 2016

The 17th edition of U-17 World Cup was held in India, which became the worlds most attended event in the

history.

Sports


GROWTH OPPORTUNITIES IN THE MEDIA AND

ENTERTAINMENT SEGMENTS…(2/2)


Size of the Indian radio industry is expected to reach US$ 745.65 million by 2021, up from Rs 26 billion US$

399.26 million in 2017

Phase III of e-auctions for FM radio licenses will provide an impetus to the segment

Radio advertising is another area likely to experience accelerated growth

Radio

Size of the music industry is expected to grow to US$ 396.22 million by 2021, up from Rs 13 billion (US$

199.63 million) in 2017

Mobile VAS and arrival of 3G are likely to lead to a surge in paid digital downloads

Phase III radio licensing will also help in increasing music revenues from radio

Music

Size of the Indian film industry is expected to touch Rs 192 billion (US$ 2.98 billion) by 2020, up from Rs 156

billion (US$ 2.40 billion) in 2017

Increasing digital screens and 3D films are expected to help industry growth

In order to promote India as a location destination for foreign production houses, the government is setting up

a single window clearance system for shooting permissions

To promote joint productions, co-production agreements have been signed with Italy, Germany, Brazil, UK,

France, New Zealand, Poland, Spain and Canada

Film

Recent investment of US$ 3 billion was made by Amazon.com Inc., focusing primarily on the establishment

of their online streaming service, Amazon Prime, in the country.

The niche segment for Netflix in India is much bigger than the whole markets in most countries and the

company has commissioned the highest number of shows in India after US, UK and Japan.

Hotstar India is the largest premium online streaming platform with 350 million followers.

Online Streaming

Services


INDUSTRY

ASSOCIATIONS


INDUSTRY ASSOCIATIONS

Agency Contact Information

Indian Motion Picture Producers’ Association (IMPPA)

"IMPPA HOUSE”, Dr Ambedkar Road, Bandra (West), Mumbai - 400 050 Tel: 91-22-26486344/45/1760 Fax: 91-22-26480757 Website: www.indianmotionpictures.com/imppa/index.html

The Film and Television Producers Guild of India

G-1, Morya House, Veera Industrial Estate, Off Oshiwara Link Road, Andheri (W), Mumbai - 400 053 Tel: 91-22-66910662 Fax: 91-22-66910661 E-mail: [email protected] Website: www.filmtvguildindia.org

Newspapers Association of India (NAI)

A -115, Vakil Chamber, Top Floor, Vikas Marg, Shakarpur, Delhi - 110092 Tel: 91-9971847045, 9810226962 E-mail: [email protected] Website: www.naiindia.com

Association of Radio Operators for India (AROI)

304, Competent House, F-14, Connaught Place, New Delhi - 110001 Tel: 91- 124-4385887 e-mail: [email protected] Website: www.aroi.in

The Indian Music Industry (IMI)

Crescent Towers, 7th Floor, B-68, Veera Estate, Off New Link Road, Andheri West, Mumbai - 400 053 Tel: 91-22- 26736301 / 02 / 03 Fax: 91-22-26736304 Website: www.indianmi.org

The Indian Society of Advertisers

Army and Navy Building, 3rd Floor, 148, Mahatma Gandhi Road Mumbai- 400001 Tel: +91 (022) 2285 6045 / 2284 3583 / 2204 2116 Fax: +91 (022) 2204 2116 E-mail: [email protected]


USEFUL

INFORMATION


GLOSSARY

AGV: Animation, Gaming and VFX

ARPU- Average Revenue Per User

CAGR: Compound Annual Growth Rate

DIPP: Department of Industrial Policy and Promotion, Ministry of Commerce and Industry

DTH: Direct to Home

FDI: Foreign Direct Investment

FM: Frequency Modulatio

FY: Indian Financial Year (April to March)

GST: Goods and Service Tax

IPO: Initial Public Offering

M&A: Merger and Acquisition

M&E: Media and Entertainment

PPP: Purchasing Power Parity

US$: US Dollar

VAS: Value Added Services

VFX: Visual Effects

Wherever applicable, numbers have been rounded off to the nearest whole number


EXCHANGE RATES

Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)

Year INR INR Equivalent of one US$

2004–05 44.95

2005–06 44.28

2006–07 45.29

2007–08 40.24

2008–09 45.91

2009–10 47.42

2010–11 45.58

2011–12 47.95

2012–13 54.45

2013–14 60.50

2014-15 61.15

2015-16 65.46

2016-17 67.09

2017-18 64.45

Q1 2018-19 67.04

Year INR Equivalent of one US$

2005 44.11

2006 45.33

2007 41.29

2008 43.42

2009 48.35

2010 45.74

2011 46.67

2012 53.49

2013 58.63

2014 61.03

2015 64.15

2016 67.21

2017 65.12

Source: Reserve Bank of India, Average for the year


DISCLAIMER

India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation

with IBEF.

All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced,

wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or

incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval

of IBEF.

This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the

information is accurate to the best of Aranca and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a

substitute for professional advice.

Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do

they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation.

Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any

reliance placed or guidance taken from any portion of this presentation.

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